Israel and Iran Trade Strikes on Persian New Year Amid Energy Market Turmoil

Escalation of Conflict Between Israel and Iran

Israel and Iran have engaged in a series of airstrikes early Friday, marking a significant escalation in their ongoing conflict. This war has had far-reaching consequences, sending shockwaves through the global economy and increasing the risk of direct involvement from Iran’s Arab neighbors.

Local media reports indicate that activists in Tehran heard strikes around the capital, while blasts were also reported in Jerusalem. Sirens and booms echoed across the city as families in East Jerusalem celebrated the first night of Eid. The situation was not limited to Jerusalem; sirens were also heard across a wide area in northern Israel, from Haifa to the Galilee and along the border with Lebanon. Millions of residents rushed to shelters as the conflict intensified.

Iranian state media reported that four missile salvos were launched at Israel shortly after one another. According to Israel’s military, there were a dozen missile launches on Thursday alone, highlighting the intensity of the attacks.

The conflict has also seen Iran intensifying its attacks on oil and natural gas facilities in the Gulf region. Heavy explosions shook Dubai early Friday, with air defenses intercepting incoming fire over the city. Residents were observing Eid al-Fitr, the end of the holy Muslim fasting month of Ramadan, when the attacks occurred. Mosques in Dubai made the day’s first call to prayers, adding to the tension of the moment.

In addition, Saudi Arabia reported that its SAMREF refinery in Yanbu, a Red Sea port city, was hit. The kingdom has been pumping large volumes of oil westward toward the Red Sea to avoid the Strait of Hormuz, which is a critical chokepoint for global oil trade.

Disagreements Between Trump and Netanyahu

Amid the escalating tensions, Israeli Prime Minister Benjamin Netanyahu announced that, at the request of US President Donald Trump, Israel would hold off on any further attacks on Iran’s offshore South Pars gas field. This decision has sparked questions about the alignment between the two leaders in prosecuting the war.

During an Oval Office meeting with Japanese Prime Minister Sanae Takaichi, Trump expressed his disapproval of Israel’s attack on the world’s largest gas field, which serves as a vital energy lifeline for Iran. He stated, “I told him, ‘Don’t do that.’” While acknowledging that he and Netanyahu get along well, Trump emphasized that they are not always in sync. He added that Israel will no longer carry out attacks on the gas field.

Earlier, Trump had claimed in a social media post that he was unaware of the attack, further complicating the narrative surrounding the incident. Netanyahu, on the other hand, stated that Israel acted alone and agreed to Trump’s request to refrain from further attacks on the gas field. He also sought to downplay any perceived differences between himself and the US president.

Impact on Global Energy Markets

Since the US and Israel launched the war on February 28, Iran has suffered significant losses, including the deaths of its top leaders and severe degradation of its military capabilities. Netanyahu claimed in a televised address that Iran no longer has the ability to enrich uranium or produce ballistic missiles, although he did not provide evidence to support this assertion.

Despite these setbacks, Iran, now led by the son of the supreme leader killed in the war’s opening salvo, remains capable of launching missile and drone attacks. The country has shown no signs of backing down, despite its weakened military.

Iran’s control over the Strait of Hormuz, a strategic waterway through which a fifth of the world’s oil is transported, has placed global fuel supplies under intense pressure. On Thursday, Brent crude oil, the international standard, briefly surged above $119 a barrel, representing more than a 60% increase since the war began. Additionally, the European benchmark for natural gas prices has risen sharply, doubling in the past month.

Ongoing Threats and Uncertainty

The continued conflict between Israel and Iran poses a significant threat to global stability. The attacks on energy infrastructure in the Gulf region have raised concerns about the long-term impact on global LNG supply. As the situation evolves, the international community remains on high alert, monitoring developments closely. The potential for further escalation and the broader implications for global energy markets remain a pressing concern.